Revealed: how loopholes allowed pro-Brexit campaign to spend ‘as much as necessary to win’

New tranche
of Electoral Commission emails show how Vote Leave gave a student
£675,000 overnight – and the worrying implications for British democracy.

Darren Grimes. Image, Channel4, fair use.

Last year a young fashion student from County Durham called Darren Grimes registered a pro-Brexit social media campaign, aimed at persuading young people to vote to quit the EU. It was called BeLeave. At first, not many people noticed.

In its first ten weeks, BeLeave raised the sum total of £107 for its activities. But in the ten days before the Brexit referendum, Darren Grimes spent more than £675,000 on a pro-Brexit social media campaign.

Now, a string of emails released under Freedom of Information laws to WhatDoTheyKnow and seen by openDemocracy demonstrate the full scale of the loophole in Britain’s electoral rules which allowed Grimes and Vote Leave to spend this extraordinary sum – and the worrying implications it has for British democracy.

By the usual measures, BeLeave wasn’t much of a social media success. Its launch met with the traditional fate of campaigns aimed too obviously at young people: it was briefly mocked on Twitter, and then ignored. To this day, it has a sum total of 4,139 followers on Twitter. Its Facebook page seems to have been taken down, but was reported on Buzzfeed to have reached fewer than 6,000 fans. We can’t find an Instagram account.

Investigations by Buzzfeed, Private Eye and the Observer have all reported on the sudden and extraordinary £675,000 spent by BeLeave in the ten days before the referendum.

But here’s another strange thing: Darren Grimes didn’t spend the money at all. All the donations to cover his bills were paid by the official Leave campaign, Vote Leave, directly to AggregateIQ, the controversial data analytics firm linked to Trump-backer Robert Mercer. The firm was used by a range of different Leave campaign groups, who between them paid £3.3m for its services during the referendum.

All in this together?

In internal emails the Electoral Commission describes Grimes’ spending as ‘unusual’ and also finds that he did break some of its rules. But the commission decided to take the matter no further as there was “no reasonable grounds” to believe that Vote Leave and Grimes had been working together, which would have more tightly limited how much they could spend under UK electoral law.

The referendum saw a number of different groups register as campaigns on each side. These campaigns were given spending caps, designed to limit how much the rich can sway our democracy. If one campaign can simply get round its limit by donating to another on the same side, then the cap verges on meaningless. And so Electoral Commission rules are meant to restrict campaigns from getting round spend limits in this way. But legal experts and transparency advocates have questioned the Electoral Commission’s interpretation of these laws on campaigners working together, on the back of the revelations about Darren Grimes and Vote Leave.

“In practice, if campaigner X is incurring bills in the knowledge that campaigner Y is going to pay those bills it is quite difficult to see that sensibly as anything but working together,” says Jolyon Maugham QC, one of Britain’s leading barristers.

“I find it quite difficult to see how Vote Leave would have paid this student’s bills unless he was incurring expenditure that they were happy with and had been prepared to approve in advance."

Duncan Hames, director of policy at Transparency International UK said: “It is almost inconceivable that campaigners would donate to each other hundreds of thousands of pounds without some assurance or agreement as to what the money would be spent on. The idea that their use of the same principal service provider was somehow not co-ordinated but a mere co-incidence is as implausible as it is convenient for those campaigners investigated.”

‘Spend as much money as needed in order to win the referendum’

As a registered Leave campaigner, Grimes was allowed to spend up to £700,000 during the referendum. Earlier this year a Vote Leave source told a parliamentary committee that it had enlisted Mr Grimes’s BeLeave campaign because it was close to breaching its £7 million spending limit and wanted to ensure all the money it had been given would be used. Under UK electoral law, this is fine. The Electoral Commission has ruled that such donations are allowed – so long as there was no ‘plan or other arrangement’ between Darren Grimes and Vote Leave about how the money was spent.

However, if there is coordination in how the money is used, UK electoral law requires campaigns to declare if they are working together. As the Electoral Commission guidance says “Working together means spending money as a result of a coordinated plan or arrangement between two or more campaigners.” If campaigns are working together, they have to declare expenditure together, and their combined spending counts towards the same cap.

There were a number of controversies around joint working during the Brexit campaign. In February 2016, four months before the referendum, Steve Baker, the Conservative MP who used to chair the controversial European Research Group and is now a junior minister at the Department for Exiting the EU, told colleagues that Vote Leave could ‘create separate legal entities each of which could spend £700k: Vote Leave will be able to spend as much money as is necessary to win the referendum.” A Vote Leave spokesman later had to clarify that “Steve would never encourage anyone to break the law”. (Baker subsequently received funding from the Constitutional Research Council, the secretive organisation that gave the DUP more than £425,000 for its Brexit campaign.)

In August 2016, Darren Grimes reported his campaign spending to the Electoral Commission on behalf of BeLeave. Grimes told the Electoral Commission that his spending “was done in isolation of Vote Leave Ltd”. He also initially told the commission that Vote Leave and another pro-Brexit donor had given BeLeave the money in cash. However, the true story is in fact more surprising than that.

Here’s £675,000 - without conditions

As revealed above, Vote Leave didn’t actually give Grimes cash donations. Rather, Vote Leave paid the money directly to his sole ‘supplier’ AggregateIQ, a data analysis company linked to Trump-backer Robert Mercer that is based in small Canadian city, and which Vote Leave and other pro-Brexit campaigners spent more than £3.3m. Grimes also confirmed that another donation – £50,000 from Vote Leave donor Anthony Clarke – was actually paid directly to Aggregate IQ, too.

Specifically, on June 13 2016, Vote Leave had paid Aggregate IQ £400,000 for social media work on BeLeave’s behalf. There followed another payment of £40,000 on June 20, and £185,315 on June 21, just 48 hours before the Brexit vote.

Grimes told the Electoral Commission that although Vote Leave paid his bills with AggregateIQ, they did not dictate what the social media campaign looked like. “[M]y understanding is that Vote Leave did not buy advertising services to gift to BeLeave but discharged BeLeave’s debt to AIQ by a transfer of cash at our request. It was a not a condition of the donation either that the donation be spent on advertising – but that is what we wanted to do given the limited time left in the campaign period and the nature of our campaign,” Grimes wrote to the Electoral Commission, in one of the emails seen by openDemocracy.

Grimes told the Electoral Commission that he had not co-ordinated with Vote Leave, although Vote Leave did directly pay AggregateIQ for social media on BeLeave’s behalf. “We didn’t discuss with Vote Leave how we would spend the money apart from telling them that it was for our digital campaign and that is why we asked for the money to be paid directly to the company were working with Aggregate IQ,” Grimes said. “Vote Leave had no say or input in our strategy or our campaign spending.”

The Electoral Commission found that by registering these donations as cash Grimes had misreported on his return “due to lack of understanding”. However, the Electoral Commission decided that there were “no reasonable grounds” for suspecting that Vote Leave knew details of the social media campaign they were paying for on Darren Grimes’s behalf – knowledge which would have constituted ‘joint working’. Last September, the commission decided that a formal investigation was not in the public interest.

On November 15, Buzzfeed journalist Jim Waterson wrote to the Electoral Commission asking if the commission was planning to investigate “potential co-ordination” between Vote Leave and Grimes’s campaigns. In response staff said they “found no evidence that Darren Grimes and Vote Leave worked together in a way that broke the law… based upon what you have told us, we are content that there is nothing in the information you have provided below that needs us to re-consider this decision.”

In February 2017, the Electoral Commission launched an investigation into referendum spending by Vote Leave and Britain Stronger in Europe.On the back of a series of articles, particularly by Carole Cadwalladr in the Observer, the Commission began looking at the role of AggregateIQ in the referendum campaign. The Electoral Commission wrote to Darren Grimes again, this time asking him to ‘please explain why you chose to commission AggregateIQ in particular to undertake the work you reported in your spending return, rather than another company.’

Replying on March 3, Grimes told the Electoral Commission that he decided to spend more than £675,000 with AggregateIQ after volunteering with Vote Leave and watching the US presidential election process. “I attended some Vote Leave Ltd events during the campaign as a volunteer activist and socialised with some members of staff. I asked and was told that AIQ (AggregateIQ) was running Vote Leave’s digital campaign and I also became aware that AIQ had worked on Ted Cruz’s presidential campaign, that I was greatly impressed by. I was therefore confident that they could assist us in putting the proposed donation to effect in the time available,” Grimes said in emails to the Electoral Commission.

Grimes told the Commission that before Vote Leave approached him, his BeLeave social media campaign had struggled for funding, and for traction. ‘Until Vote Leave Ltd made me aware that they were in a position to make a donation and asked if BeLeave was able to make use of it we had not been able to put any funds behind pushing our messaging despite previous requests for donations.”

Writing in notably formal language, Grimes also reiterated that BeLeave had worked separately from Vote Leave. “Be Leave ran its own independent campaign from the outset and throughout, we did not take any instruction, collaborate with, or indeed discuss any aspect of our digital campaign, or our relationship with AIQ with anyone from Vote Leave Ltd, apart from the fact of the donation itself.”

The Electoral Commission also asked AggregateIQ about Grimes’s spending. In March, AIQ president and CEO Zack Massingham told the Commission: “We did not discuss with Mr Grimes any of the work undertaken by AggregateIQ on behalf of Vote Leave Limited nor are we aware of any details being shared with Mr Grimes.” Massingham also told the Commission that he had no reason to believe that Vote Leave and BeLeave were “not separate and distinct”. The Electoral Commission subsequently decided not to launch a larger investigation into Grimes’s spending.

A watchdog for our democracy?

Vote Leave and Grimes have both consistently said that there was no coordination between the two campaigns. But barrister Jolyon Maugham QC says the Election Commission needs to do more to investigate potential breaches and enforce its own rules. “I think the British public deserves better than this from the Electoral Commission. It is the watchdog of our democracy. A true watchdog stands sentient and courageous. This looks more like the yearning for a quiet life of an ageing Labrador,” says Maugham in a detailed blog post on the issue of joint working.

Commenting on this story, Duncan Hames, director of policy at Transparency International UK highlighted the role of dark money in the Brexit referendum.

“Far from being the people’s plebiscite, the facts show the referendum campaigns were dominated by big money on either side of the debate. Our research found that over half of reported donations to referendum campaigners came from just ten people, with only a hundred donors accounting for almost all of the reported contributions that were made.

“Our electoral law is of no use if it is not enforced in practice.”

Darren Grimes has not responded to openDemocracy’s attempts to contact him about this affair. Vote Leave no longer exists, but its former staff haven’t responded to our attempts to contact them. The Electoral Commission chose not to comment.

The full cache of Election Commission emails about AggregateIQ are available on The Ferret.

About the authors

Peter Geoghegan is investigations editor of openDemocracy's main site. He can be found on Twitter @PeterKGeoghegan.

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